Cardiologists Settle Stark Claims Stemming from Saint Joseph Case

October 27, 2014 – In The News

Report on Medicare Compliance

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William Maruca was quoted in the Report on Medicare Compliance article, “Cardiologists Settle Stark Claims Stemming from Saint Joseph Case.”Full text can be found in the October 27, 2014, issue, but a summary is below.

Two cardiologists agreed to pay $380,000 to settle false claim allegations that they had sham agreements with Saint Joseph Hospital in London; nine months after the hospital settled a false claims case for allegedly performing medically unnecessary cardiac procedures linked to the cardiologists’ practice.Thesettlement highlights the importance of guaranteeing hospital-physician agreements are at fair-market value and that physicians document all of their services, Fox Rothschild attorney William Maruca. Looks can be deceiving, “It’s the underlying circumstances that have the red flags.” he warned

Arrangements must pass the commercial reasonableness test, Maruca says. “Would a rational business spend money on something they didn’t need other than to induce referrals of business?” Is the hospital paying a physician for duplicate services or for more hours than a clinical or administrative function requires? “What’s reasonable? There aren’t a lot of good benchmarks for this,” he says. “If it looks like something is a lot of make-work, you should be concerned about it.”

Also, it’s not commercially reasonable to pay steep rates to physicians for routine administrative tasks, Maruca says. Hospitals have to pay fair-market value for commercially reasonable services. Just because a neurosurgeon could do three procedures in the hour it would take to perform medical director services isn’t a reason to pay the equivalent. “It is not based on the surgical skills. It is based on whatever administrative services you are paying for,” he says.